Broker snap: Citi reiterates buy on Lloyds Banking Group

Lloyds Banking Group's shares rose Wednesday as Citigroup said the company's capital position was strong and reiterated its 'buy' rating on the stocks."We believe the capital position is robust and that underlying earnings risks are more towards the upside, rather than downside," the analyst said. Lloyds made a £570m pre-tax loss in 2012, an improvement on the £3.5bn deficit of the previous year. However, since announcing the results on March 1st the bank's shares have fallen 9.0%, underperforming the wider index. Citigroup attributed the drop to: a heavier hit to the bank's book value and capital position from International Accounting Standards; share issuance to pay the hybrid coupon; guidance on net interest margin of 1.98% and negative media reports."We believe that these concerns are overdone," the broker said.The analysts also played down concerns over reports that UK Financial Investments (UKFI), the body that manages the UK Government's bank investments, will look to reduce its stake once the share price exceeds the government in-price.RD